Deductibles are the amounts that policyholders must pay out-of-pocket before their insurance coverage kicks in. For example, if you have a health insurance plan with a $1,000 deductible, you will need to pay the first $1,000 of your medical expenses before your insurer starts to cover costs. Understanding deductibles is crucial for managing your healthcare expenses. Higher deductibles often lead to lower monthly premiums, but they can also result in significant out-of-pocket costs if unexpected medical issues arise. It's essential to choose a deductible that aligns with your financial situation and health needs.